The New York Department of Financial Services (NYDFS) slapped a US$30 million fine on the crypto arm of trading app Robinhood on Tuesday for allegedly violating the bank secrecy act, anti-money laundering, and cybersecurity regulations.
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Fast facts
- The financial regulator also asked the firm to retain an independent consultant to ensure compliance with the NYDFS regulations.
- “As its business grew, Robinhood Crypto failed to invest the proper resources and attention to develop and maintain a culture of compliance—a failure that resulted in significant violations of the Department’s anti-money laundering and cybersecurity regulations,” NYDFS Superintendent Adrienne A. Harris said.
- Robinhood crypto had seen the fine coming and had said last year that it expected to pay US$30 million to the NYDFS.
- The NYDFS investigation found that Robinhood crypto lacked resources, including manpower, to maintain compliance with regulatory requirements.
- In 2021, the Financial Industry Regulatory Authority (FINRA) levied a US$70 million fine on Robinhood for providing misleading information and failing to protect users against outages.
- Robinhood share prices closed up 2.1% at US$9.23 in New York on the news as uncertainty regarding the fine ended.
See related article: Robinhood posts 78% decline in Q3 crypto profits